1) Which of the following helped reduce sulfur dioxide emissions, a leading cause of
acid rain?
(i)corrective taxes
(ii)tradable pollution permits
(iii)amendments to the Clean Air Act
a.(i) only
b.both (i) and (ii)
c.(iii) only
d.both (ii) and (iii)
2) Table 20-11
Poverty Thresholds in 2011, by Size of Family and Number of Related Children
Under 18 Years [Dollars]
Source: U. S. Bureau of the Census, Current Population Survey.
Refer to Table 20-11. What is the poverty line for a family of eight with two children?
a.$18,123
b.$36,463
c.$41,027
d.$43,487
3) Amanda inherited the only local cable TV/Internet company in town after her father
passed away. The company has a local monopoly on the delivery of high-speed Internet
service. The company is completely unregulated by the government and is therefore
free to operate as it wishes. Assume that Amanda understands the true power of her new
monopoly. Which of the following statements is (are) correct?
(i)She will be able to set the price of high-speed Internet service at whatever level she
wishes.
(ii)The customers will be forced to purchase high-speed Internet service at whatever
price she wants to set.
(iii)She will be able to achieve any profit level that she desires.
a.(i) only
b.(ii) only
c.(i) and (iii) only
d.(i), (ii), and (iii)
4) A production possibilities frontier has a bowed shape if the opportunity cost is
constant at all levels of output.
a.True
b.False
5) Table 17-15
This table shows a game played between two players, A and B. The payoffs in the table
are shown as (Payoff to A, Payoff to B).
Refer to Table 17-15. Which of the following outcomes represents a Nash equilibrium
in the game?
a.Up-Center
b.Middle-Right
c.Down-Left
d.Down-Center
6) What is the equilibrium quantity in this market?
a.2.5 units
b.5 units
c.7.5 units
d.10 units
7) A competitive firm has been selling its output for $20 per unit and has been
maximizing its profit, which is positive. Then, the price falls to $18, and the firm makes
whatever adjustments are necessary to maximize its profit at the now-lower price. Once
the firm has adjusted, its
a.quantity of output is lower than it was previously.
b.average total cost is lower than it was previously.
c.marginal cost is higher than it was previously.
d.All of the above are correct.
8) The scientific method can be applied to the study of economics.
a.True
b.False
9) Free goods are usually efficiently allocated without government intervention.
a.True
b.False
10) Which of the following is correct?
a.Governments can never improve market outcomes.
b.Governments can sometimes improve market outcomes.
c.Governments can always improve market outcomes.
d.Government can never make the income distribution more equal.
11) Which of the following quotations illustrates the Tragedy of the Commons?
a.”A bird in the hand is worth two in the bush.”
b.”The only difference between the rich and other people is that the rich have more
money.”
c.”What is common to many is taken least care of, for all men have greater regard for
what is their own than for what they possess in common with others.”
d.”Anyone who is not a socialist before he is 30 has no heart¾ anyone who is still a
socialist after he is 30 has no head.”
12) Assume Diana buys computers in a competitive market. It follows that
a.Diana has a limited number of sellers to turn to when she buys a computer.
b.Diana will find herself negotiating with sellers whenever she buys a computer.
c.if Diana buys a large number of computers, the price of computers will rise
noticeably.
d.None of the above is correct.